Stablecoin adoption, ETFs to drive crypto performance by 2025: Ct
Adoption of stablecoins and cryptocurrency exchange-traded funds (ETFs) will boost digital asset performance by 2025, according to a December 26 Citi Research report.
Crypto ETF revenues, onchain activity and stablecoin usage have surged since President-elect Donald Trump won the U.S. presidential election in November, and those metrics will remain elevated into the new year, Citi said.
“Adoption is, in our view, the most important concept for tracking crypto's long-term performance,” the report said.
“ETF activity and broader volume is improving, and the market value of stotocoin – which we see as a measure of flow into the crypto ecosystem – is increasing rapidly (especially post-election).”
Source: Ct
Related: 2025 ‘Demand Shock' Will Drive Bitcoin Price Up – Signum
ETF income
“More likely to be new funds/market participants entering the crypto space than other trading activities,” Crypto ETF earnings are among the most important metrics to watch, the report said.
They will also have a significant impact on price performance, especially for Bitcoin (BTC).
In the year By 2024, the BTC ETF's revenues accounted for “~46% of the variance in BTC price action, with $1 billion in beta showing a return of ~4.7%,” the asset manager said.
In the year On November 21, US Bitcoin ETFs broke $100 billion in net assets for the first time, according to data from Bloomberg Intelligence.
Rising institutional inflows could cause a positive “demand shock” for Bitcoin, boosting BTC's price in 2025, asset manager Signum Bank said in December.
Source: Ct
Onchain activity
Onchain activity has also increased, especially for stable coins. This could be a key performance driver next year.
After Trump won the election, the market capitalization of Stablecoin increased significantly. The three major stablecoins — Tether (USDT), USD Coin (USDC) and Dai — have collectively raised more than $25 billion, Citi said.
This is a particularly bad thing for decentralized finance (DeFi), because “stablecoins are taking decentralized finance to the next level,” according to the report.
Other metrics of onchain growth are also at a higher level. Activity on the Ethereum network, including layer-2 blockchains, is up 210% compared to 2023 averages.
Citi also noted that the number of large and small crypto wallets increased slightly after the November US election.
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